Total townhouse construction was up on a year-over-year basis during the third quarter of 2014.

According to NAHB analysis of Census data of Starts and Completions by Purpose and Design, single-family attached starts totaled 20,000 for the quarter, 17 percent higher than a year prior. Over the last four quarters, townhouse construction starts totaled 70,000, up slightly from 69,000 from the four quarters prior to that.

Using a one-year moving average, the market share of townhouses now stands at 11 percent of all single-family starts, slightly higher than the prior quarter.

The peak market share of the last two decades for townhouse construction was set during the first quarter of 2008, when it reached 14.6 percent. This high point was set after a fairly consistent increase in the share beginning in the early 1990s.

Despite the drop in market share during the Great Recession, the share for townhouse construction is expected to increase in coming years – with occasional ups and downs. For example, recent weakness in production has been associated with reduced levels of first-time homebuyers.

Nonetheless, the prospects for townhouse construction over the long run are positive given large numbers of homebuyers looking for medium density residential neighborhoods, such as urban villages that offer walkable environments and other amenities.